US Coins

Nine authorized purchasers to participate

Most of the nine authorized purchasers that have ordered the America the Beautiful 5-ounce silver bullion coins have indicated they will start selling the coins Jan. 3.

U.S. Mint

Nine of the U.S. Mint’s 11 authorized purchasers for silver bullion coins have opted to participate in the sale of the 2010 America the Beautiful 5-ounce .999 fine silver bullion coins.

None of the nine authorized purchasers have scheduled to begin accepting orders for the coins from customers until Jan. 3.

The only two authorized purchasers that chose not to participate in the sales of the 3-inch, 5-ounce silver coins are two firms that, although they have New York City offices, are headquartered outside the United States.

Commerzbank is headquartered in Germany, and ScotiaMocatta, a division of the Bank of Nova Scotia, is headquartered in Canada. Representatives of the two firms would not discuss their reasoning for not participating in the program.

One of the Mint’s selling restrictions is that the authorized purchasers must sell strictly to American customers only at U.S. addresses.

Participating dealers

The nine authorized purchasers that placed orders for the maximum allocation of 3,000 coins for each of the five coin designs by the 3 p.m. Eastern Time deadline Dec. 17 and will be selling the coins are:

? Coins ‘N Things, Bridgewater, Mass.,

? MTB, New York City,

? Jack Hunt Coin Broker, Buffalo, N.Y.,

? FideliTrade Inc., Wilmington, Del.,

? American Precious Metals Exchange, Oklahoma City, Okla.,

? A-Mark Precious Metals, Los Angeles,

? The Gold Center, Springfield, Ill., telephone (217) 793-8002

? Dillon Gage Inc., Dallas,

? Prudential Securities Inc., New York City, (212) 778-6667

FideliTrade Inc. is the only purchaser to indicate thus far that it will sell the coins as individual pieces; the firm is limiting sales to one coin per customer and is not selling sets.

The coins’ order of popularity, based on collector inquiries, according to some authorized purchasers and secondary market distributors, is Grand Canyon National Park, Yellowstone National Park, Yosemite National Park, Mount Hood National Forest and Hot Springs National Park.

The 6,000 coins from each of the five coin designs that Commerzbank and ScotiaMocatta relinquished were reallocated Dec. 20 to the remaining nine authorized purchasers who chose to participate. The nine firms had until 3 p.m. Eastern Time Dec. 23 to place orders for the remaining coins. If all 6,000 coins are not ordered, any remaining coins would be put back in the pool for another reallocation.

The authorized purchasers are restricted to selling all of their coins acquired from the Mint to the American public for no more than 10 percent above the cost of acquisition from the Mint, plus reasonable shipping and handling costs.

The price each of the nine firms will charge for the coins will vary based on a firm’s own acquisition costs, determined by the price at which the individual firm acquired each coin from the Mint.

The acquisition price represents the London PM fix per ounce in a designated day, times five ounces per coin, plus the $9.75 per coin premium set by the Mint.

Five authorized purchasers placed orders Dec. 10, two placed orders on Dec. 17, and two on Dec. 20. Those orders will be acquired at three different London PM fix prices, with prices for orders placed by Dec. 23 based on yet another fix price.

Considering fix prices, five-coin sets are likely to be offered at retail for from just under $800 to $850, or approximately $160 to $170 per coin. Total costs could vary further depending on the shipping and handling costs.

Sales restrictions

On Dec. 1, the authorized purchasers were informed that they could place orders with the Mint for their maximum allocation on Dec. 6. However, because of complaints from Mint customers that the coins were being sold at 80 to 100 percent over the precious metal melt value, Mint officials on Dec. 6 suspended the program until they could re-examine the terms of sale.

Mint officials informed the authorized purchasers Dec. 9 that the program would be reopened Dec. 10 with new restrictions on sales, with all sales to secondary distributors eliminated.

Mint officials Dec. 10 restricted the authorized purchasers to selling the coins to only the public, and subsequently emphasized the public represented the “American public”; the authorized purchasers may not sell the coins to secondary market retailers nor to collectors outside of the United States. The authorized purchasers are also banned from selling sets to their employees and relatives.

The authorized purchasers also are prohibited from charging a premium more than 10 percent of their cost. ¦

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